Organization and management theory related to hrm

1. Presented by:-
Saaema Akhtar

2. Types of Management Theory
• Classical Approach
• Neo Classical Approach
• Modern Approach

3. • Classical management theory was introduced in the late 19th century. It became
widespread in the first half of the 20th century, as organizations tried to address issues of
industrial management, including specialization, efficiency, higher quality, cost reduction
and management-worker relationships.
• Three streams of classical management theory are - Bureaucracy
(Weber), Administrative Theory (Fayol), and Scientific Management
(Taylor).

4. Features
Clear Hierarchical Structure
• One of the advantages of the classical management structure is a clear
organizational hierarchy with three distinct management levels. Each
management group has its own objectives and responsibilities.
• The levels of leadership and responsibilities are clear and well defined

5. Clearly Defined Division of Labor
• One of the advantages of classical management approach is the division of labor. Projects
are broken down into smaller tasks that are easy to complete. Employees' responsibilities
and expectations are clearly defined. This approach allows workers to narrow their field of
expertise and to specialize in one area.
• The division of labor approach leads to increased productivity and higher efficiency, as
workers are not expected to multitask. Small-businesses owners can benefit from taking
this approach if they are looking to increase production with minimal expense.

6. Motivated by Money
• According to classical management theory, employees should be motivated
by monetary rewards. In other words, they will work harder and become more
productive if they have an incentive to look forward to.
• This gives management easier control over the workforce. Employees feel
appreciated when being rewarded for hard work.

7. Single Leader Makes Decisions
• The autocratic leadership approach is the central part of classical management theory. It states that
an organization should have a single leader to make decisions, to organize and direct the
employees.
• All decisions are made at the top level and communicated down. The autocratic leadership
approach is beneficial in instances when small-business decisions need to be made quickly by a
leader, without having to consult with a large group of people, such a board of directors. Small
businesses, especially sole proprietorships, can have an advantage in taking this approach, as they
need a strong leader to grow.

8. Tall Organizational Structure
• Large, complex organizations often require a taller hierarchy. In its simplest form, a tall
structure results in one long chain of command similar to the military. As an organization
grows, the number of management levels increases and the structure grows taller. In a tall
structure, managers form many ranks and each has a small area of control.
Flat Organizational Structure
• Flat structures have fewer management levels, with each level controlling a broad area or
group. Flat organizations focus on empowering employees rather than adhering to the
chain of command. By encouraging autonomy and self-direction, flat structures attempt to
tap into employees’ creative talents and to solve problems by collaboration.

9. A flat organization refers to an organization structure with few or no levels of management between management
and staff level employees. The flat organization supervises employees less while promoting their increased
involvement in the decision-making process.
Advantages of a Flat Structure
• It elevates the employees' level of responsibility in the organization.
• It removes excess layers of management and improves the coordination and speed of
communication between employees.
• Fewer levels of management encourage an easier decision-making process among
employees.
• Eliminating the salaries of middle management reduces an organization's budget costs.

10. Disadvantages of a Flat Structure
• Employees often lack a specific boss to report to, which creates confusion
and possible power struggles among management.
• Flat organizations tend to produce a lot of generalists but no specialists.
The specific job function of employees may not be clear.
• Flat structure may limit long-term growth of an organization; management
may decide against new opportunities in an effort to maintain the structure.
• Larger organizations struggle to adapt the flat structure, unless the
company divides into smaller, more manageable units.

11. Hierarchical Organizational Structure
A hierarchical organization follows the layout of a pyramid. Every employee in the organization, except one,
usually the CEO, is subordinate to someone else within the organization. The layout consists of multiple entities
that descend into the base of staff level employees, who sit at the bottom of the pyramid.
• Advantages of a Hierarchical Structure
• Employees recognize defined levels of leadership within the organization; authority and
levels of responsibility are obvious.
• Opportunities for promotion motivate employees to perform well.
• Hierarchical structures promote developing employees as specialists. Employees may
narrow their field of focus and become experts in specific functions.
• Employees become loyal to their departments and look out for the best interest of their
area.

12. Disadvantages of a Hierarchical Structure
• Communication across different departments tends to be less effective than in
flat organizations.
• Rivalry between departments may inflame as each department makes
decisions that benefit its own interests rather than the organization's as a
whole.
• Increased bureaucracy often hinders an organization's speed to change.
Increased time may be required to respond to clients.
• Salaries for multiple layers of management increase an organization's costs